Mercedes Benz India today said it will hike its product prices by up to Rs 3 lakh expressing disappointment over high duties imposed in the Budget.

"The Budget is very disappointing for us. We were hoping for some reduction in taxes for large vehicles instead of hiking it further," Mercedes Benz India Director (Corporate Affairs and HR) Suhas Kadlaskar told PTI.

The premium car makers usually bring in advanced technology in to the country and this step will be very counter productive, he added.

"We are going to pass on the additional burden to customers. We have not decided the exact amount yet, but on an average it will vary between Rs 2 lakh and Rs 3 lakh," Kadlaskar said.

Finance Minister Pranab Mukherjee hiked the excise duties for petrol cars with engines under 1,200 cc and diesel cars with engine capacity under 1,500 cc, but the length exceeding four metres to 24% from 22% and a fixed duty of Rs 15,000.

Petrol and diesel driven vehicles having length exceeding four metres and engine capacity of over 1,200 cc and 1,500 cc respectively will now be charged with an ad valorem duty of 27%, instead of the earlier 22% and a fixed duty of Rs 15,000.

Besides, The Finance Minister also hiked basic customs duty to 75% from 60% for fully imported vehicles with FOB value more than $40,000 and with engine capacity of over 3,000 cc and 2,500 cc for petrol and diesel driven vehicles.

"The increase in customs duty on cars and SUVs, valued above $40,000, from 60% to 75% seems to be a step to encourage local manufacturing, value addition and employment," SIAM President S Sandilya said.